Federal Reserve Chair Janet Yellen said Tuesday that the economic recovery is not yet complete and for that reason the Fed intends to keep providing significant support to boost growth and improve labor market conditions. Yet, Yellen also said current monthly bond purchases will likely end in October, the AP reported.
Those bond purchases have been trimmed five times, taking them from $85 billion per month down to $35 billion per month currently. Yellen said if the economy keeps improving, the Fed will keep reducing the bond purchases at upcoming meetings with the final move being a $15 billion reduction at the October meeting.
In delivering the Fed’s semi-annual economic report to Congress, Yellen said the Fed’s future actions will depend on how well the economy performs. She says if labor market conditions continue to improve more quickly than anticipated, the Fed could raise its key short-term interest rate sooner than currently projected. But she said weaker conditions will mean a longer period of low rates.
US precious metals markets did not react well to Yellen’s statements. Following two days of increases, the price of US silver dropped by 2.4 percent to end at $20.91 per ounce on Monday, July 14. Indian silver closed 1.3 percent lower at INR 46,611 ($776.75) per kilogram. At JPY 696.00 ($6.87), the price of Japanese silver finished the market day up 1.0 percent per 10 grams. After a 0.3 percent increase, Chinese silver finished the day at CNY 4,405 ($709.95) per kilogram.
Weakening prices followed two days of improvement as the price of US gold bullion dropped 2.1 percent to $1,307 per ounce. Following a couple days of improvement, the price of Indian gold bullion weakened by 1.3 percent. Prices closed at INR 28,200 ($469.94) per 10 grams. At JPY 4,351 ($42.92), the price of Japanese gold bullion finished the market day up 0.3 percent per gram. The price of Chinese gold bullion changed direction with a 0.2 percent drop. After two days of improving prices, the metal finished at CNY 266.55 ($42.96) per gram.
Following two days of rising prices, the price of US platinum bar dropped 1.0 percent to $1,493 per ounce. After improving for two days, the price of Japanese platinum bar declined 0.2 percent to JPY 4,919 ($48.53) per gram. The price of Chinese platinum bar remained steady at CNY 319.00 ($51.41) per gram.
US palladium bar prices saw a 0.2 percent decline to $867.00 per ounce. The price of Japanese palladium bar showed little movement on Monday at JPY 2,870 ($28.31) per gram. The price of Chinese palladium bar held steady at CNY 195.00 ($31.43) per gram.